The Drilldown: Kearl Lake mine a COVID-19 hotspot

An outbreak of COVID-19 at the Kearl Lake oil sands site has been connected to over 100 cases of the virus across Alberta, Saskatchewan, British Columbia and Nova Scotia. The mine, which is located in Northern Alberta, has continued its operations throughout the pandemic as an essential service with heightened social distancing measures to try and halt the spread of the virus.

Kearl Lake’s first two cases were confirmed on April 14 and after a third was discovered on April 15, the Alberta Health Services announced that the work camp had an outbreak. On April 17, the number of cases had risen to 12 and exceeded 100 by May 8, having even been spread to three other provinces in the country as workers had traveled home.

According to local contract tracing done by the Saskatchewan Health Authority, Kearl Lake is a hot spot for the virus and has recommended that individuals traveling from Northern Alberta should participate in a 14-day self-isolation and follow through with testing if signs of the virus begin to show.

Ovintiv Inc., formerly known as Encana Corp. has been struggling amid COVID-19 since relocating its headquarters to the United States. Production from the shale oil formations in its major areas in Texas and Oklahoma has been faltering and will continue to see a decline following the company’s commitment to cutting production by 65,000 barrels per day as a response to the crash in global demand for the commodity.

Output production levels in the Permian Basin are expected to drop, and some analysts even forecast that the shale grounds will face challenges indefinitely because of actions being taken by Ovintiv and other oil producers which has caused the market to crumble.

In other news, an energy ministry official from Saudi Arabia announced today that it has instructed the country’s national oil company, Saudi Aramco, to cut their output production by an extra 1 million barrels per day come June. This, paired with the fact that some travel restrictions have been eased, has resulted in oil prices rising, according to Reuters.

Canadian gold producer Alacer Gold Corp. will be purchased by Vancouver-based SSR Mining Inc. who has mining operations in Argentina, Canada and the U.S. The companies will create a new board with members from both operations split equally and will be based out of Denver, The Globe and Mail reports.

The deal between Alacer and SSR is worth is worth $2.4 billion and foresees around 780,000 ounces of gold to be produced as Alacer owns a gold mine located in Turkey.

In other news, Calgary-based Ensign Energy Services Inc. experienced a loss of $29.3 million in its first quarter. Back in March, the company decided to cut its 2020 capital spending by $60 million and also reduced the pay that its executives were earning. More recently, Ensign has decided to stop its payment of six cents per share to shareholders, reports The Canadian Press.